Monday, February 25, 2019

Same News, Same Moves

Monday, February 25, 2019 - Last week, stock markets were influenced by familiar headlines: Fed policy commentary, U.S.-China trade negotiations and a mixed bag of economic reports. In Macro news, U.S. equities finished slightly higher for a fourth straight week, with the S&P 500, Dow Jones Industrial Average and NASDAQ closing the week up 0.6%, 0.6% & 0.7% respectively. Not to mention, we saw emerging markets outperforming (EEM, +2.21%).

Surprisingly, downside volatility remains subdued as the S&P 500 hasn't experienced a decline of 1% or more in the last 20 trading days. Since the December bottom, the key factors moving stock prices continue to be signs of a possible trade resolution with China, the Fed's patient attitude while gauging economic conditions before increasing rates and lastly a better-than-feared fourth-quarter earnings season. However, it should be expected that both upside and downside volatility will likely increase as the year continues. To that point, this week the market will likely take its cues from a full plate of economic headlines as well as ongoing political uncertainties, including but not limited to, President Trump's scheduled meeting with North Korean leaders, the delayed release of housing data and the fourth-quarter U.S. GDP report and a host of S&P 500 earnings announcements.

ETFG Quant Movers – Those ETFs who have had the largest weekly change in their respective, ETFG Quant ratings:

ETFG Quant Winners: The top five ETFG Quant gainers from this past week included funds with an EM focus as expected from Macro trends, as well as, a few unexpected showcases. The EM winners were X-trackers Harvest CSI 500 China-A Shares Small Cap Fund (ASHS) and Schwab Emerging Markets Equity ETF (SCHE) showing gains of 27.82% and 18.08% to their respective overall ETFG Quant Scores. The other winners included Bernstein Global Research Fund (BRGL), BMO Elkhorn DWA MLP Select Index ETN (BMLP) and Global X Lithium & Battery Tech ETF (LIT) showing gains of 27.27%, 21.42% and 20.73% respectively.

ETFG Quant Losers: Notable losers included Vanguard Consumer Staples ETF (VDC), Vanguard Value ETF (VTV), Vanguard Mid-Cap ETF (VO) and Vanguard Total World Stock ETF (VT) - these ETFs saw loses of -27.24%, -23.60%, -22.46% and -20.80% to their respective overall scores.

ETFG Weekly Select List - the five most highly rated ETFs per Sector, Geographic Region and Strategy as ranked by the ETFG Quant model.

Piggy backing on the previously mentioned theme of the emerging market development class, we'd like to highlight the top ranked funds in the EM portion of the Geography category. The largest movement was observed when iShares MSCI Emerging Markets ETF (EEM) moved from the 5th position to the 2nd when comparing this week’s list to the preceding. In addition, we saw some fresh faces making an appearance with Columbia EM Core ex-China ETF (XCEM), First Trust RiverFront Dynamic Emerging Markets ETF (RFEM) and Columbia Emerging Markets Consumer ETF (ECON) snagging the 2nd through 5th place respectively.

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